INTRODUCTION

3.1 One of the primary tasks for the Commission was to identify the criteria against which a complaints handling system for lawyers could be judged. In DP 26, the Commission noted that:

All of the Australian jurisdictions share some similar experiences in the area of dealing with complaints against legal practitioners.¹ The same types of complaints predominate and in no State has the profession managed to overcome the general underlying problem of misunderstanding and lack of communication. Several trends are apparent across the jurisdictions, notably participation by lay persons in the complaints process, and the increase in the range of sanctions available against legal practitioners.²

3.2 To the Commission’s surprise, however, we discovered that there has been little consideration of the broader philosophical questions, rather than merely the operational questions, about complaints handling and discipline in the professions in Australia - apart from the Commission’s own earlier inquiry into the regulation of the legal profession in New South Wales, which concluded a decade ago. The (now defunct) Victorian Law Reform Commission (VLRC) recently completed an inquiry into the accountability of the legal profession, but did no go into these matters in the discussion paper³ or the ensuing report.⁴

3.3 In its response to the VLRC’s discussion paper, the Law Institute of Victoria wrote that it had approached Standards Australia (formerly, the Standards Association of Australia) and requested that body’s assistance in the development of an objective standard which could be applied to all complaints-handling bodies.⁵ It was hoped that this could be used to assess and compare the effectiveness of such bodies. The Law Institute initially was advised by Standards Australia that the cooperation of the other professional bodies was required for the production of national benchmark procedures for handling complaints, and that the other legal professional associations in Australia were not particularly enthusiastic about or supportive of this course of action. However, Standards Australia now “has decided to produce such a standard, beginning with a generic document and followed by guidelines for the legal sector”.⁶

3.4 In this Chapter, the Commission specifies the features which it considers constitute “best practice” for a professional complaints handling system, based on the submissions received and our own research and analysis of such systems in New South Wales and elsewhere. As well as enumerating these features, we measure the existing systems operated by the Law Society and the Bar Association against these “best practice principles”. In the following chapters, these principles inform the discussion and are applied in the design of the proposed new system.

3.5 In outline form, these “best practice” principles are:

• independence and impartiality;
• recognition of the multiple aims of a professional disciplinary system;
• accessibility;
• efficiency and effectiveness;
• procedural fairness;
• openness and accountability;
• external scrutiny and review;
• contribution to the general enhancement of professional standards; and
• proper funding and resources.

3.6 These matters are discussed in turn, below. At the conclusion of this Chapter, the Commission discusses its reasons for preferring the option of establishing an office of Legal Services Ombudsman as the basis for effective reform of the complaints handling system.

INDEPENDENCE AND IMPARTIALITY

The complaints handling system must be independent and impartial. Public confidence in the integrity of the system requires that the system must be free from even the appearance of bias, external influence, conflicts of interest or impropriety.

Commentary

3.7 The most important feature of a disciplinary system - whether professional or otherwise - is its independence and impartiality. Persons with a legitimate grievance must feel that their complaint will be dealt with in a fair and unbiased manner. The worry with a system which is operated entirely by the professional association itself is that it gives rise, as the American Bar Association (ABA) has stated, to “the familiar criticism that the fox is guarding the henhouse”, which is likely to be made even where the system may in fact be “fair to both respondents and complainants”.⁷

3.8 A number of different approaches have been tried to ensure the actual and perceived independence and impartiality of professional complaints systems. In the United States, the ABA has recommended that, because of the “significant distrust of the fairness and impartiality of self-regulation”, the:

disciplinary system must be controlled and managed exclusively by the state’s highest court and not by state or local bar associations. This is necessary for two primary reasons. First, the disciplinary process must be directed solely by the disciplinary policy of the Court and its appointees and not influenced by the internal politics of bar associations. Second, the disciplinary system must be free from even the appearance of conflicts of interest or impropriety. When elected bar officials control all or parts of the disciplinary process, these appearances are created, regardless of the actual fairness and impartiality of the system.⁸

3.9 California is the leading example of a State which has moved to a disciplinary system which is controlled by the judiciary and is fully independent of the practising legal profession.⁹

3.10 The 1979 Royal Commission on Legal Services in England and Wales expressed similar concerns to those of the American Bar Association, stating that:

We had evidence of a general feeling of unease about the Law Society’s handling of complaints, a feeling that “lawyers look after their own”.¹⁰

3.11 The publicly-funded National Consumer Council in the United Kingdom (the “NCC”) also has been critical of the fact that “impartiality is not visible ... [a]nd it is the impression given to the public which counts.”¹¹ The Council added that:

It seems unlikely that any solicitor would advise a client to bring a case before a court or tribunal that was dominated by senior members of an association of which the defendant is also a member. More specifically, members of a profession will also have an innate sympathy for a fellow professional. They can imagine the problems of the professional, but may not be able to imagine the problems faced by the client.¹²

3.12 The Law Society of England and Wales has attempted to meet the issue of perceived independence by physically relocating the Solicitors’ Complaints Bureau from the Law Society’s headquarters in London to premises in the Midlands, and endeavouring to inculcate a “culture of independence” in the Bureau.¹³ Added to this now is an independent statutory office of the Legal Services Ombudsman, with powers to review the way complaints have been handled by the professional associations and to make recommendations to the Lord Chancellor for improvement of the system.¹⁴

3.13 In Victoria, the legal professional associations are largely self-regulating, but there is also the (part-time) statutory office of Lay Observer, with the power to review or re-investigate a dismissed complaint and to report to Parliament on the operation of the system.¹⁵ The Victorian Law Reform Commission recently has recommended replacement of the Office of Lay Observer with a more powerful Office of Legal Services Commissioner.¹⁶

3.14 In New South Wales, complaints about health care services providers (doctors, nurses and others) are no longer handled by their professional associations, but rather are made to the Complaints Unit of the Department of Health.¹⁷ A Bill to replace the Unit, which was established by administrative act under legislative authority, with an independent statutory body, the Health Care Complaints Commission was recently withdrawn from Parliament to permit further public discussion and consultation.¹⁸

3.15 Although the legal professional associations in New South Wales prefer to use the term “co-regulation”¹⁹ - since the Law Society and Bar Councils operate under legislative authority and there are statutory tribunals and a degree of external monitoring (through the Conduct Review Panel) - in actual practice the legal profession has effective control of the complaints handling system. Under the Legal Profession Act 1987, the Law Society and Bar Association (or their executive Councils) have the statutory authority to:

• deal directly with all (potential) complainants in providing advice and assistance;
• receive all complaints;
• process and investigate all complaints;
• decide which complaints to dismiss (the vast majority) and which to refer for a hearing by the Legal Profession Standards Board or the Legal Profession Disciplinary Tribunal;
• nominate the legal members of the Standards Board and Disciplinary Tribunal for appointment by the Attorney General;
• nominate the legal members of the Legal Profession Conduct Review Panel for appointment by the Attorney General; and
• control the issuing, suspension and cancellation of lawyers’ practising certificates, and to prosecute “unqualified practitioners”.

3.16 However much the professional associations actually endeavour to exercise these functions in a fair and impartial manner, the perception that the system is run by and for lawyers must linger.

3.17 As mentioned in Chapter 2, the Commission asked the Roy Morgan Research Centre to conduct an “Omnibus Survey” (ie, an opinion poll) in New South Wales in November 1992. Only 15.7% of the 648 adults surveyed believed that the Law Society and the Bar Association were the best bodies to handle complaints against lawyers. Nearly 80% wanted regulation by a public authority independent of the legal profession: 54% opted for “a Commission or Ombudsman”, 16.2% supported “a government body”, and 8.5% wanted “a body controlled by judges and the courts”.²⁰

3.18 Assuming the establishment of a new body to investigate complaints against lawyers, few considered that the body should consist of lawyers only (5.2%) or mostly lawyers (9.5%); rather, over 80% thought that the new body should consist of equal numbers of lawyers and non-lawyers (46.1%), mostly non-lawyers with some lawyers (24.8%), or non-lawyers only (10.1%).²¹ Respondents with a tertiary education were most in favour of a Commission or Ombudsman, and most likely to limit the participation of lawyers in a new body. Clearly, then, public opinion acknowledges that the legal profession has a role to play in handling complaints against lawyers, but sees self-regulation or professional domination as inappropriate and prefers an independent process with some involvement of lawyers. These results are very similar to those obtained in an NCC-commissioned survey in the United Kingdom in 1984.²²

3.19 The issue of independence figured very prominently in the submissions received by the Commission, with virtually all of the submissions (expressly or implicitly) supporting Option Two (a Legal Services Complaints Commission) and Option Three (a Legal Services Ombudsman) calling for a complaints handling system which is, and is widely perceived to be, independent of the legal profession. Many of these submissions point to the alleged inherent conflict of interest involved in the Law Society and Bar Association being simultaneously responsible for advancing the interests of their members (the “sectional” or “trade union” function) as well as regulating and disciplining that membership in the public interest (the “regulatory” function). This matter was discussed at some length in DP 26.²³

3.20 Submissions to this effect were received from, among others: the New South Wales Commissioner for Consumer Affairs, Mr John Holloway;²⁴ the Chief Magistrate of New South Wales, Mr Ian Pike;²⁵ the Registrar of the Legal Profession Disciplinary Tribunal, Mr Robert Bennett;²⁶ the Chairperson and members of the Legal Profession Conduct Review Panel;²⁷ the New South Wales Council for Civil Liberties;²⁸ the Combined Community Legal Centres Group;²⁹ the Kingsford Legal Centre;³⁰ the Lawyers Reform Association;³¹ the Australian Consumers Association;³² and the Foundation Dean of Law at the University of Wollongong, Professor Jack Goldring.³³

3.21 The Commonwealth Attorney General’s Department has made a submission along similar lines to the Trade Practices Commission’s inquiry into regulation of the legal profession, concluding that the handling of complaints against barristers or solicitors should be the responsibility of, or be supervised by, an independent body, such as a legal services ombudsman or a complaints agency, rather than a professional body.³⁴

3.22 The only submissions received by the Commission favouring the retention and improvement of the current system (Option One in DP 26) were from the Law Society and the Bar Association.

3.23 The Commission believes that the problem of the public perception of bias is insuperable unless truly independent mechanisms are put in place. For the reasons discussed at the end of this Chapter, the Commission has concluded that the establishment of an office of Legal Services Ombudsman would best meet the public interest needs for independence and accountability, as well as having a number of other important advantages.

RECOGNITION OF THE MULTIPLE AIMS OF A PROFESSIONAL DISCIPLINARY SYSTEM

The design and execution of the complaints handling system must recognise that there are multiple aims, including: (1) redressing the consumer complaints of users of legal services, as well as protecting the general public interest by (2) ensuring that individual legal practitioners comply with the necessary standards relating to honesty, diligence and competence, and (3) maintaining the ethical and practice standards of the whole legal profession at a sufficiently high level.

Commentary

3.24 As part of its research program in this area, the Commission consulted with the Retail Traders Association of New South Wales about the ways in which commercial enterprises handle consumer grievances. The general policy is that “the customer is always right”, based on the view that it costs businesses six to ten times more to get new customers than to keep old ones. Thus, the leading retailers believe it is worth going to considerable lengths to resolve customers’ grievances, even where the retailers do not necessarily accept that they were at fault . Considerable expenditure also has been put into developing staff training programs for improved customer service, including the handling of complaints about goods and services.

3.25 While much can be learned from the client-centred approach to complaints handling by the leading retail organisations, the position is different in principle in relation to complaints about the provision of professional services, where there are the important added dimensions of public interest on the one hand, and the reputation and rights of practice of professionals on the other.

3.26 As the Commission stated in DP 26:

The system should be ... more attuned to redressing the grievances of individual complainants, but this should not be at the expense of the general public interest in ensuring that licensed legal practitioners conduct their work with honesty, diligence and competence, and that the standards of practice required of lawyers generally are maintained at a sufficiently high level.³⁵

3.27 Thus, the system for handling complaints against lawyers must serve at least three aims: to address promptly the specific concerns of particular complainants; to secure the compliance of individual legal practitioners with the standards of professional practice; and to ensure that the standards of the profession generally are maintained at a high level. At the same time, it must be remembered that rights of practice must not be arbitrarily or capriciously removed or limited, so that a lawyer who has been complained about should be entitled to expect a fair hearing before suffering any penalty.

3.28 In the “one procedure fits all” approach which has applied in NSW, the (first and third) aims of client satisfaction and maintenance of high professional standards have largely been lost sight of. In practice, the traditional approach has had a quasi-criminal flavour, looking at whether the complainant has made sufficiently strong allegations to put into question the lawyer’s continued right to practice. Where the allegations relate to dishonesty or trust account irregularities, for example, the professional associations have a reasonable record of vigorous prosecution. Trust account matters account for the large majority of cases in which solicitors have been struck off the Roll in the past decade or so.³⁶

3.29 In DP 26, the Commission stated that one of the biggest problems with the existing system has for some time been the “profound gap between what angered clients and what lawyers and their professional associations saw as important enough to merit disciplinary action.”³⁷ While clients overwhelmingly complain about such matters as negligence, incompetence, delay, poor communications, discourtesy and overcharging, these complaints are rarely proceeded with and rarely result in any censure, sanction or compensation. Even where the complainant has achieved the desired result - say, an apology, or the reduction of a bill of costs, or the removal of a solicitor’s lien - the cumbersome processes and lengthy delays involved may take the gloss off the successful resolution. It is clear from the submissions received and from the Commission’s own research - especially from the survey of Law Society complaint files - that this was fair criticism and that the problems are still pervasive.

3.30 The systems for handling complaints against solicitors in Victoria and in England and Wales have changed in recent years, putting far more emphasis on the prompt resolution of clients’ grievances through the use of consensual dispute resolution techniques and the ready award of compensation.³⁸ The submissions of both the Law Society of NSW and the NSW Bar Association recognise the need to move in this direction and both propose mediation schemes for lawyer-client disputes.

3.31 The Commission generally supports these initiatives and makes recommendations in this area, below. However, the Commission stands by its caveat that a greater orientation towards client concerns must not come at the expense of the other aims of the system. What is needed is a comprehensive system with a number of separate components which, when taken together, meet all of the desired aims.³⁹ (See also below, regarding efficiency and effectiveness.)

ACCESSIBILITY

The complaints handling system must be widely accessible to potential complainants. This involves effective access to information, assistance, officials and institutions relevant to the process, with minimal disincentives imposed by time, cost or complexity.

Commentary

3.32 In its 1985 review of the legal profession’s complaints procedures in England and Wales, the National Consumer Council (NCC) suggested that the system operated reasonably well in respect of the “articulate person who is able to identify and substantiate a manifest case of professional misconduct”.⁴⁰ However, the system was rather less satisfactory in the run of matters, since “cases and circumstances are rarely as straightforward as these. Many complainants will face personal, educational, social and financial problems in bringing a genuine complaint”.⁴¹

3.33 The NCC identified a number of specific problems of accessibility, including among other things, (1) the absence of an integrated system, with complainants finding it difficult to know where to lodge a complaint; (2) the difficulty in knowing what constitutes misconduct (which is likewise a problem for lawyers and their professional associations); (3) the problem of negligence allegations, which may have to be the subject of a separate civil claim in the courts; and (4) the centralisation of the relevant offices and procedures (in London).⁴² The NCC recommended that access problems could be substantially reduced with the establishment of “a single body charged with specific complaints-handling responsibilities”, which would be “a visible reception point for all complaints”.⁴³

3.34 The American Bar Association’s Commission on Evaluation of Disciplinary Enforcement (ABA CEDE) came to similar conclusions in 1991. The ABA CEDE saw the need for a system with a number of component parts, but warned that:

The availability of more than one mechanism to resolve disputes can backfire and result in increased public dissatisfaction unless a simple and direct procedure exists for making a complaint. Complainants should not be expected to know the distinctions among component agencies. They need a central intake office - one clearly designated agency to which to take any type of complaint.⁴⁴

3.35 The ABA CEDE recommended that the central intake agency also be charged with: (1) providing assistance to complainants in stating their complaints; (2) making a preliminary assessment of the validity of the complaint; (3) dismissing the complaint or forwarding it to the appropriate agency for further action; (4) providing information to complainants about available remedies and procedures; (5) keeping complainants informed about the status of their complaints; and (6) tracking the handling and disposition of each complaint.⁴⁵

3.36 The Commission agrees with the NCC and the ABA CEDE that a visible, central reception point for all complaints would be highly desirable, particularly in a divided profession such as ours in NSW, where there is currently the added complexity of the separate handling of complaints against barristers and solicitors by the Bar Association and the Law Society, respectively.

3.37 In DP 26, the Commission identified the earliest phase of the complaints system - including the provision of information and assistance to potential complainants and the reception and formal recording of complaints - as the most critical:

The initial step in the complaints-handling process may well be the most important, especially from the point of view of the complainant. Persons making complaints must be assured that their problems will be handled promptly, efficiently, sensitively and impartially.⁴⁶

3.39 Although the Legal Profession Act 1987 (NSW) currently requires the professional associations to “take all reasonable steps to ensure that a person who wishes to make a complaint is given such assistance as is necessary to enable the person to make the complaint in accordance with [the statutory requirements]”,⁴⁹ the approach of the professional associations has been largely one of supplying a prospective complainant with a complaint form and an explanatory brochure, and leaving it to the complainant to take the initiative. Ironically, the legal profession has argued strongly against this “Do It Yourself Kit” approach in other contexts in which a person’s rights or property interests are at issue - such as in conveyancing, wills and probate, and family law matters - on the basis that it is essential that the person has the benefit of direct legal advice and expertise in order to appreciate fully his or her position, options, rights and obligations.

3.40 The special needs of a person with a limited grasp of the English language (whether from a non-English-speaking background or with a disability affecting comprehension or expression) must be catered for adequately. This obviously will involve the production of literature in a range of community languages as well as the provision of interpreter services, but an effective strategy also will involve care in disseminating information in ways which actually reach the target groups.⁵⁰

3.41 A program of community education about the role of lawyers and the existence and basic nature of the complaints system would be of general value.⁵¹

3.42 In the Morgan Poll conducted for the Commission, just under one-third (32.6%) of respondents correctly identified the Law Society and Bar Association as the bodies with primary responsibility for handling complaints against lawyers. Almost 40% could not venture an answer; 19% thought it was the responsibility of the Ombudsman; and the rest incorrectly identified a number of other agencies, such as the Department of Consumer Affairs (2.7%), the Attorney General’s Department (1.5%) and the Independent Commission Against Corruption (1.2%). Older (over-35), male, urban, and tertiary-educated respondents were somewhat more likely to know about the regulation of lawyers, although only affluence (income over $40,000) correlated reasonably highly (54.6%) with correct knowledge of the system - probably because of higher levels of social and professional contact with lawyers.

3.43 In this Report, the Commission makes a number of recommendations aimed at significantly improving access to the complaints handling system. Among other things, we recommend that there be a Complainants’ Charter of Rights which specifies that complainants have a statutory right to advice, assistance and effective access to the system, including interpreter services, physical access and so on. The establishment of a properly resourced office of Legal Services Ombudsman, charged with the responsibility of providing such advice and assistance, also should help considerably.

EFFICIENCY AND EFFECTIVENESS

Having regard to the multiple aims of a complaints handling system, a simple and comprehensive range of efficient and effective processes, services and techniques must be available to address the legitimate needs of complainants, legal practitioners and the society. This will involve: the prompt and thorough investigation of all disciplinary matters; consensual dispute resolution of appropriate complaints; a flexible range of sanctions and remedies; the availability of education, counselling and assistance for lawyers to prevent or minimise poor practice; continuous monitoring of the system; and coordination among the various agencies with responsibility for regulating the conduct of lawyers.

Commentary

3.44 As discussed above, the disciplinary system traditionally has used a common - and not very successful - approach to resolving all complaints about lawyers. This involved the processing of individual complaints to determine whether the allegations were sufficiently serious and backed by sufficient evidence to warrant a formal disciplinary proceeding to consider whether the practitioner was guilty of professional misconduct.

3.45 It is generally well-accepted now that the system must be substantially more variegated, with the recognition, among other things, that:

• “less serious” allegations may be actionable (as “unsatisfactory professional conduct”); that apart from any possible action against the lawyer, the grievances of individual complainants require redressing, such as through the award of compensation;
• there is a need for a faster and easier method of dealing with allegations of overcharging than by taxation of a bill of costs in the Supreme Court;⁵²
• consensual conflict resolution techniques may be more effective in resolving some types of disputes;⁵³ and
• measures should be taken to prevent poor professional practice, through programs offering education, counselling and assistance.

3.46 Thus, complaints handling systems now must be comprehensive, utilising a range of processes, services and techniques to address all aspects of lawyer discipline, client satisfaction, and public interest.⁵⁴ However, the American Bar Association has warned that there is also a danger that expanding the number of mechanisms available will cause confusion for complainants, with the consequent need to ensure that the entire system is efficient, effective and well-coordinated, with a single point of entry.⁵⁵

3.47 Some of the procedures mandated in the Legal Profession Act 1987 as well as some of the programs initiated by the legal profession itself have made the disciplinary system more complete and well-rounded. However, it is clear the system is still lacking or needs improvement in some key respects.

3.48 As measured by the Morgan Poll (above), very few members of the public can identify the bodies mainly responsible for handling complaints, much less the details of the system. Indeed, it is unlikely that many members of the legal profession would be able to describe fully the current system with any confidence. The Commission itself had to go to some pains to provide an accurate description and schematic drawing of the current statutory schemes in DP 26.⁵⁶ In the words of a leading mediator, “on a somewhat lighter note, the existing mechanisms in NSW could surely only have been designed by a bunch of lawyers.”⁵⁷

3.49 In NSW, where the practice of law is divided into two branches (barristers and solicitors) with separate admission and regulation,⁵⁸ there are some inherent complicating factors which are not present in a jurisdiction with a unified profession. It is also true that a system designed by lawyers may involve some complexity because of the traditional concern for natural justice and procedural fairness. Nevertheless, it seems that the system in NSW is unnecessarily complicated, with resulting negative effects on access, efficiency and public confidence.

3.50 Under the present system, complaints against barristers and solicitors are received and processed entirely separately by the Bar Association and Law Society, respectively. Explanatory literature, complaint forms, and other information and assistance are separately provided. Two different bodies - the Law Society Council and the Bar Council - have statutory responsibility for assisting complainants, investigating complaints, and making certain dispositions, such as dismissing complaints and issuing reprimands. Two different tribunals - the Standards Board and the Disciplinary Tribunal - may hear and determine complaints, although here the division is not based on the style of practice of the lawyer involved, but rather on the seriousness of the allegations (unsatisfactory professional conduct and professional misconduct, respectively). The Board and Tribunal may award compensation (while the Councils may not), but only where the complainant has requested this in the original complaint.

3.51 The complainant may seek review of a Council decision to dismiss a complaint (but not a decision to issue only a reprimand), but the Conduct Review Panel may only recommend that the Council change its decision, first by approaching the Council itself and then by approaching the Attorney General. As happens in many cases, the complaint may be dismissed because it involves “mere negligence” or other unsatisfactory conduct which is determined to fall short of the “unsatisfactory professional conduct” disciplinary offence, and the complainant then must pursue a whole other course of action before the Consumer Claims Tribunal or the civil courts (in an action for negligence or breach of contract). Disputes over fees and costs, another significant category of complaints, also are frequently shuttled out of the system, with the client told to seek review of the solicitor’s bill of costs in the Supreme Court through the arcane process known as “taxation”. (Barristers fees are not directly taxable.) To the inconvenience and distress of complainants, it sometimes may take many months to find out that the wrong process was chosen first up, and that another avenue will have to be explored.

3.52 In this Report, the Commission makes a number of recommendations aimed at making the system more simple, streamlined and all-encompassing. The key features of the proposed system involve: a single point of contact for advice, assistance and lodging of complaints, through the office of the Legal Services Ombudsman; more flexibility in the award of compensation and other remedial orders; greater use of informal and consensual dispute resolution processes; faster, more active and more thorough investigation of complaints; merger of the Standards Board and Disciplinary Tribunal into a single body (the Legal Services Tribunal) able to hear all complaints against lawyers; and giving the Conduct Review Panel direct powers to refer matters to the Tribunal.

PROCEDURAL FAIRNESS

Both complainants and legal practitioners shall be entitled to be treated with fairness and justice in the investigation, hearing and determination of complaints.

Commentary

3.53 It is fundamental that the complaints handling system must be perceptibly fair to both complainants and respondent lawyers, with the rules of natural justice applicable to at least the formal disciplinary proceedings.

3.54 Disciplinary proceedings are neither criminal nor civil, but rather have been classified by the courts as “protective” in nature (ie, protective of the public interest).⁵⁹ Since these proceedings are protective rather than punitive or prosecutorial, the rules of natural justice must be observed, but the respondent practitioner is not entitled to the full panoply of procedural rights and safeguards which apply to, say, criminal proceedings. The onus of proving misconduct lies on the complainant - usually the Law Society or Bar Association by the time the matter reaches the stage of a formal hearing. This is generally on the balance of probabilities, although the amount of proof required increases in accordance with the seriousness of the charges and the consequences for the respondent.⁶⁰

3.55 In DP 26, the Commission noted that the tenor of many of the provisions of the Legal Profession Act 1987 seemed to suggest that “complainants and complaints ought to be treated with caution, while legal practitioners who are the subject of a complaint are to be accorded full procedural rights”⁶¹. We wrote then, and still maintain, that:

Without derogating from the natural justice requirements which must be applied in favour of those who are in jeopardy of being sanctioned, the rights and responsibilities of complainants and legal practitioners should be constructed in a parallel manner.⁶²

3.56 To this end, the Commission suggested that there be a legislative statement of a “Charter of Rights” for complainants, in order to clarify the position of complainants and emphasise the fairness and integrity of the system. In this Report, the Commission recommends that such a Complainants’ Charter of Rights be inserted into the Legal Profession Act, dealing with such matters as rights to: advice and assistance; immunity from civil liability; be kept informed; respond to statements by the other party; adequate reasons for decisions; be present at any hearing; and to have any adverse decision independently reviewed.

3.57 The advancement of the rights of complainants does not mean that the rights of respondent lawyers necessarily need be watered down, however. Lawyers should never be subjected to procedures which arbitrarily or unfairly do harm to their reputations or qualify or remove their practising rights. The Commission makes a number of recommendations in this Report aimed at improving the level of procedural fairness for a lawyer who is the subject of a complaint. For example, the Commission proposes that there be a limitation period on complaints (of six years, with discretion in the Legal Services Tribunal to consider claims out of time) and, even more importantly, that a complaint should lead to a limited waiver of the rules about confidentiality,⁶³ so that a lawyer properly may defend allegations made by a present or former client without the necessity of gaining the permission of the complainant to disclose confidential communications.

OPENNESS AND ACCOUNTABILITY

Public confidence in the complaints handling system requires that the system be fair, open and accountable. Subject to the need for confidentiality in certain circumstances, as many elements of the system as possible should be open to the public and on the record, and reasons for decisions must be provided. Non-lawyers must meaningfully participate at all levels of the process to ensure that different experiences and perspectives are represented, and to assure complainants that the system is not operated solely by and for lawyers.

Commentary

3.58 In the context of complaints handling, it is necessary to employ a number of strategies in order to achieve the aim of an open and accountable system which encourages public confidence.

The need for “open justice”

3.59 The American Bar Association has identified secrecy as “the single greatest source of public distrust of lawyer disciplinary systems”.⁶⁴ In DP 26, the Commission agreed that:

As a general matter, the restoration and maintenance of public confidence in the legal profession’s disciplinary processes is dependent upon clear evidence that the system is fair, open and accountable. As many elements of the system as possible should be open to the public and on the record, and reasons for decisions should be available.⁶⁵

3.60 There is an increasing social expectation that public institutions will be as open and “transparent” as practicable. In recent times, this expectation has manifested itself in calls for “open justice” in the courts, Freedom of Information legislation, judicial review of administrative decision-making, “whistle blower protection” legislation, and other similar measures. (There also is a similar expectation of openness emerging with respect to private institutions with a public aspect, such as major corporations.)

3.61 The disciplinary system should be subject to the principles of “open justice”. Formal hearings should always be open to the complainant and should normally be open to the general public, and subject to media reporting. At present, proceedings before the Disciplinary Tribunal are open, but Standards Board hearings are closed - even to the complainant, except for the limited purpose of considering compensation. In this Report, the Commission recommends that the merged body (the Legal Services Tribunal) should conduct its hearings in the open, although evidence which relates to confidential and privileged client-lawyer communications may need to be taken in private, and there may be the rare case in which the interests of justice compel a closed proceeding.

3.62 While open justice applies to hearings and other aspects of the system, the Commission recognises that while the complaint is at the investigative stage (or under review), the files of the investigative or review agency should be free from civil discovery or production under Freedom of Information legislation. The same public interest arguments about the integrity of the investigative process that apply to investigations by the police, regulatory agencies, the Director of Public Prosecutions, the Independent Commission Against Corruption and others, also apply to investigations into the conduct of lawyers. Once the material is produced at the Tribunal it is subject to reporting, of course. Similarly, communications made as part of an informal dispute resolution conference should be privileged. In this Report, the Commission makes specific recommendations⁶⁶ regarding confidentiality and privilege in the disciplinary system.

Lay participation

3.63 Another method of achieving the desired levels of openness and accountability is to include persons from outside the practising legal profession in the regulation of the profession. Lay participation has two main advantages: it allays the suspicion that the disciplinary system is a “closed shop” which unfairly operates to protect lawyers, and it brings to the process a range of community experiences and perspectives which would not otherwise be available.

3.64 Although there was strong opposition from the legal professional associations to the inclusion of lay persons in the disciplinary process when the Commission first considered this issue over a decade ago, the practice is now generally well-accepted by the Bar Association and the Law Society.⁶⁷ In DP 26, the Commission expressed concern that some “lay” persons - particularly those appointed by the Bar Association - were in fact retired lawyers or others with a close association with the legal profession.⁶⁸ Happily, this is no longer the case. Both the Bar Association and the Law Society now advertise for lay participants, and recent appointees appear to be more genuinely independent of the professional associations in terms of background and outlook.

3.65 The present disciplinary system allows for the participation of lay persons (ie, non-lawyers): at the investigative stage, as (minority) members of the two professional Councils’ Professional Conduct Committees; at the hearing and determination stage, as (minority) members of the Standards Board and Disciplinary Tribunal; and at the post-dismissal review stage, as (majority) members of the Conduct Review Panel.

3.66 The Commission believes that improvements still can be made in the use of lay persons, to ensure that they are able to participate fully and meaningfully. As suggested in DP 26, this may involve “special training courses, research and secretarial assistance, and other resources”, as well as providing a “realistic level of compensation for the work involved”.⁶⁹

A Public Council on Legal Services?

3.67 In 1982, the Commission first recommended the creation of a broadly constituted Public Council on Legal Services, consisting mainly of non-lawyers, to contribute to the general regulation of the legal profession.⁷⁰ The Commission initially considered the creation of a much larger body,⁷¹ but eventually recommended a nine-member Council, consisting of three nominees of the Attorney General (a lawyer, a non-lawyer, and a non-practising lawyer), three persons named by a panel comprised of the public (non-lawyer) members of the Legal Aid Commission and the Law Foundation, two persons named by the Consumer Affairs Council, and one person nominated by the Leader of the Opposition.

3.68 The Commission envisaged that the Public Council on Legal Services would play an important role in ensuring public accountability of the legal profession by, among other things, helping to select the public members of the Councils of the Law Society and Bar Association, advising the Attorney General and Parliament on policy matters, and commenting on proposed rules and regulations affecting the regulation and discipline of the legal profession. The Commission saw particular value in establishing “a pool of non-lawyers who have special interests in, and experience of, the law and the legal profession”,⁷² and providing “a forum in which, because legal practitioners do not predominate, non-lawyers would be less reluctant to express their views, and to indicate their uncertainty or lack of knowledge, than in the general regulatory bodies, which would consist overwhelmingly of practitioners”.⁷³

3.69 In the end, the Legal Profession Act 1987 provides for a “Legal Profession Advisory Council” comprised of two barristers, three solicitors and four community representatives (one of whom may be a lawyer). Of the five barrister and solicitor members, three are to be nominees of the respective professional Councils. The Advisory Council is meant to “keep under constant review the structure and functions of the legal profession” and to report to the Attorney General on any matter relating to the legal profession, or on proposed regulations referred to it.⁷⁴ However, the profession-dominated Advisory Council has never been constituted.

3.70 In its present form the Legal Profession Advisory Council would have less to offer than the recommended Public Council on Legal Services, given its composition and limited role. The views and interests of the legal profession are already well represented in the media and in the political sphere by the Law Society and the Bar Association. The views of the wider community’s interests and views about the regulation of the legal profession and the delivery of legal services are rather less well-represented, however.

3.71 The Commission is still of the view that a Public Council on Legal Services would be an appropriate body to advise on the appointment of independent members of the various committees and statutory authorities, to run orientation and training programs, and generally to “be a valuable source of support, information and views for the public members”.⁷⁵ In DP 26, we wrote that:

The Commission believes that serious consideration should be given to the establishment of the Legal Profession Advisory Council or, preferably, to the Commission’s original recommendation for a more broadly constituted Public Council on Legal Services.

3.72 Since the Commission has a standing (but not implemented) recommendation on this point which it still endorses, and this recommendation has been raised again for consideration in the New South Wales Attorney General’s Department’s recent Issues Paper on the structure and regulation of the legal profession,⁷⁶ the Commission has not found it necessary to make a further recommendation on this point in this Report.

Reporting requirements

3.73 Third, the various components of the system should be obliged to account for themselves to Parliament through (at least) annual reporting requirements. In DP 26, the Commission looked at upgrading the reporting requirements placed on the professional Councils in respect of complaints handling, both in terms of frequency and quality.⁷⁷ The Commission suggested that it become standard practice for the professional Councils and other responsible agencies to make annual reports to the Attorney General, for tabling in Parliament, which contain “a full treatment of statistics, empirical and comparative analysis, case studies, satisfaction surveys, recommendations for consequential legislative or administrative change, and so on.”⁷⁸ (The Law Society recently has commenced publishing a six monthly report on trends and statistics in the disciplinary process,⁷⁹ which the Commission considers further in Chapter 4.)

3.74 In this Report, the Commission makes a number of recommendations aimed at improving the quality and range of information to be contained in the reports of the Legal Services Ombudsman, the Law Society and Bar Councils, and the Conduct Review Panel.

External monitoring

3.75 Finally, the operations and decisions of the complaints handling system should be open to external monitoring. This is accomplished to a limited extent by the current system; however, in this report, the Commission makes recommendations aimed at substantially strengthening this external accountability from two directions: from an office of Legal Services Ombudsman at the early stages, and a more robust Conduct Review Panel at the later stages, of the complaints handling process.

EXTERNAL SCRUTINY AND REVIEW

The complaints handling system must be subject to external scrutiny at all levels to ensure its accountability and effectiveness. The existence of one or more agencies with “watchdog” or oversight responsibilities provides an important means of guarding against bias, arbitrariness, arrogance, complacency and other problems which destroy public confidence. Among other things, the system should afford a complainant the opportunity for a meaningful external review of a decision to dismiss a complaint and other adverse decisions.

Commentary

3.76 Open proceedings, lay participation and reporting, provide important internal checks on the integrity of the complaints system, as discussed above. However, concerns about the independence, fairness and efficiency of the complaints handling system also mandate the need for effective external scrutiny or oversight of the system, especially where some or all of the functions are subject to self-regulation or co-regulation by the legal profession.

3.77 Most critically, there should be some external agency or agencies with sufficient powers and resources to monitor the complaints handling process at every level. For example, Victoria currently has a Lay Observer,⁸⁰ and the Victorian Law Reform Commission has recommended the creation of a Legal Services Commissioner.⁸¹ In England and Wales, an office of Legal Services Ombudsman recently has been established.⁸² In California, there is an “independent discipline monitor”.⁸³

3.78 Under the current statutory regime in NSW, the Legal Profession Conduct Review Panel (“the Panel”) offers a measure of external scrutiny, but it has no direct powers and its role is limited to the post hoc review of dismissals.⁸⁴ The Law Society’s submission to the Commission recognised the need for external scrutiny, and proposed the introduction of a full-time “Lay Observer”, who would take over the functions of the Panel and, importantly, would be entitled to attend and participate in the meetings of the various committees and Councils, as well as attend dispute resolution conferences as an observer, and would have access to all disciplinary files.⁸⁵ The Bar Association’s submission also recognised the need for external scrutiny, but proposed enhancing the powers and resources of the Panel, rather than its replacement. The Commission agreed with much of what the Law Society and the Bar Association had to say about external scrutiny, and we outlined our own views on the functions of the external monitor in DP 26.⁸⁶

3.79 After careful consideration, the Commission recommends in this Report that the external monitoring of the legal profession would best be accomplished by dividing this function between a more robust Panel and a newly created office of Legal Services Ombudsman. The Panel would continue to exercise a review function in relation to the decisions of the legal professional Councils, but would have greater jurisdiction, resources and investigative powers, as well as the direct authority to refer matters to the Legal Services Tribunal (without the intervention of the Attorney General) and the power to recommend the payment of compensation to complainants. The Panel also would operate to review the decisions of the Legal Services Ombudsman where the Ombudsman was involved in the investigation or dismissal of a complaint.

CONTRIBUTION TO THE GENERAL ENHANCEMENT OF PROFESSIONAL STANDARDS

The work and experience of the complaints handling system must feed back into the legal profession to contribute to the enhancement of professional standards, such as through changes in legal education, legal practice, or rules of ethics and professional responsibility.

Commentary

3.82 One of the Commission’s main criticisms of the current complaints handling system is that it does little to assist in the enhancement of professional standards. While the most serious disciplinary matters - those involving allegations of professional misconduct - are subject to open justice in the Disciplinary Tribunal, are published, and sometimes attract media coverage, such matters are relatively rare.⁸⁷ Little seems to be learned, however, from the experience of processing the vast bulk of complaints, which raise “less serious” but far more prevalent client concerns about such matters as negligence, incompetence, delay, poor communications, discourtesy and overcharging.

3.83 In DP 26, the Commission considered that the gap between what clients most frequently complained about and what the legal profession took seriously enough to refer to a disciplinary hearing was a major source of complainant dissatisfaction and of the public perception that the disciplinary system only “covers up” for lawyers.⁸⁸

3.84 In the Commission’s survey of Law Society complaint files, it became apparent that the disciplinary system simply was not geared towards identifying matters of general concern from the run of individual complaints.

3.85 For example, a large proportion of the complaints boil down to the recollection of the solicitor versus the recollection of the complainant. (These are virtually all resolved in favour of the solicitor) Only in the rare case could the solicitor produce anything in writing to confirm his or her version of events. It seems to the Commission that good practice requires:

• the keeping of file notes of relevant conversations and other matters;
• routine, written (and preferably signed) confirmation of instructions;
• clarity in relation to fee arrangements; and
• clarity regarding who is responsible for disbursements (medical reports, valuations, translators, etc).

3.86 Yet the Law Society did not commonly suggest to the solicitor concerned that he or she might want to improve their record keeping in future. The tone of the letters notifying solicitors that the complaint against them had been dismissed certainly would not lead them to question their standards of practice. Nor is it common for a general practice direction or reminder to the profession to emanate from the complaints-handling experience of the Law Society.

3.87 The New South Wales Department of Health’s Complaints Unit informed the Commission that it takes care to translate the mass of particular complaints into general concerns and lessons which are fed back into the medical and allied health professions through the specialist medical royal colleges, hospitals, medical schools and other institutions. The Complaints Unit expressly recognises one of its major objectives to be “to identify the implications for policy and administration which would improve the quality of health services”,⁸⁹ and the Unit has established a sophisticated computer database to monitor actively patterns and trends which may have policy implications.⁹⁰ The Health Care Complaints Bill 1992 (which has been withdrawn for further consultation and consideration) lists the first object of the legislation as “to facilitate the maintenance of standards of health services in New South Wales”.⁹¹

3.88 In the new system proposed in this Report, the Legal Services Ombudsman should play an important role in monitoring patterns and trends in complaints and should be under a positive obligation to assist in raising professional standards through research, education, training, and publication efforts.⁹²

3.89 However, the major effort will still have to come from the profession itself. The Australian legal professions have lagged somewhat behind their counterparts in the United States, Canada and the United Kingdom in this regard, although the Australian professions traditionally have suffered from more limited resources and a lack of cohesion and organisation at the national level.⁹³

3.90 In DP 26, the Commission noted that there was a pressing need in New South Wales:

• to emulate the “Client Care” program introduced in England and Wales, which is directed towards the improvement of lawyer-client communications and relations;⁹⁴
• to develop codes of ethics and practice which are modern and more client- and community-oriented, rather than aimed at matters of intra-professional comity and restricting work practices;⁹⁵
• to organise firms of solicitors in such a way as to emphasise matters of legal ethics and professional responsibility, such as through the creation of in-house ethics committees, specific training programs, and greater supervision;⁹⁶
• to provide more basic and continuing legal education about legal ethics and professional responsibility, including courses which are incidental to the disciplinary process;⁹⁷ and
• to provide more counselling and assistance programs for legal practitioners who seek help or are required to seek help to resolve personal, professional, or commercial difficulties.⁹⁸

3.91 In this Report, the Commission makes a number of recommendations aimed at facilitating these developments.

PROPER FUNDING AND RESOURCES

It is essential that adequate resources (financial, human and technical) are provided to permit the operation of a comprehensive system of regulation, with the features enumerated above. The sources of funding should recognise the interests of both the legal profession and the general public in the maintenance of high standards in the provision of legal services.

Commentary

3.92 A complaints handling system with all of the attributes detailed above requires an adequate level of resourcing, including decent (professional and support) staffing levels, salaries which attract officers with the appropriate levels of expertise, computer hardware and software, and so on. A proper system involves not only the thorough investigation of complaints, but the timely investigation and processing of complaints, as well as a range of support and ancillary services and sufficient checks and balances to inspire public confidence.

3.93 The ABA CEDE recommended that it was necessary to ensure that:

adequate funding and staffing is provided for the disciplinary agency so that: (a) disciplinary cases are screened, investigated, prosecuted and adjudicated promptly; (b) the work load per staff person permits careful and thorough performance of duties; (c) professional and support staff are compensated at a level sufficient to attract and retain competent personnel; (d) sufficient office and data processing equipment exist to efficiently and quickly process the work load and manage the agency; (e) adequate office space exists to provide a productive working environment; and (f) staff and volunteers are adequately trained in disciplinary law and procedure.⁹⁹

3.94 Further, sufficient staff, resources and expertise must be available in order to:

(1) fully investigate complaints, by such means as sending investigators into the field to interview witnesses and examine records and evidence; and (2) regularly monitor sources of public information such as news reports and court decisions likely to contain information about lawyer misconduct.¹⁰⁰

3.95 The adequacy of resourcing of Ombudsman offices and other regulatory and “watchdog” agencies is often a source of controversy. However, there should be fewer problems in this regard with respect to a Legal Services Ombudsman or other external monitor of the legal profession, given the greater diversity of potential funding sources.

3.96 The ABA Model Rules for Lawyer Disciplinary Enforcement place the principal responsibility for funding the disciplinary system on the profession itself,¹⁰¹ although it is noted that “there is also a strong public interest in effective disciplinary enforcement” so that it is “not inappropriate for public funds to be used toward financing the system”.¹⁰²

3.97 In New South Wales, all of the expenses of the existing system - the expenses of the Law Society and Bar Association, as well as those of the Standards Board, Disciplinary Tribunal and Conduct Review Panel - are reimbursed from the Statutory Interest Account.¹⁰³ In other words, the entire cost of the legal profession’s disciplinary system is paid for out of the interest on clients’ funds held in solicitors’ trust accounts.

3.98 By way of contrast, in the elaborate and expensive disciplinary system in California - regarded as one of the leaders in professional regulation in the United States - the entire cost is borne by the legal profession itself through graduated licence fees.¹⁰⁴

3.99 To provide another model, the NSW Department of Health’s Complaints Unit is funded out of Consolidated Revenue, as will be the case with the proposed Health Care Complaints Commission when it replaces the Unit.

3.100 The Commission considers that it is appropriate in New South Wales for all three sources - statutory interest money, practising certificate fees, and general revenue - to be applied towards the complaints handling system to ensure adequate funding. However, we recommend that the primary source of funding for the complaints handling system should be a levy or charge on lawyers’ practising certificates. As detailed in Chapter 5, a rather small annual charge per lawyer (of say $75-150 ) would raise quite a considerable amount ($1-2 million), which would not only pay for the cost of the office of the Legal Services Ombudsman but also would free up funds in the Statutory Interest Account which could then be applied to legal aid.

CONCLUSIONS

The central issue of independence

3.101 The submissions from the Law Society¹⁰⁵ and the Bar Association¹⁰⁶ in response to DP 26 both stated that there was no evidence for the Commission’s supposition that there is an undercurrent of public dissatisfaction with the existing system. As discussed above, the issue of the independence of the complaints handling system was central to most of the submissions received by the Commission. All of the submissions - except those from the Law Society and the Bar Association - which considered the question favoured replacement of the current system with a Legal Services Ombudsman or an independent Legal Services Complaints Commission.

3.102 It is most instructive that these submissions came from a broad range of individuals and organisations, most of whom have direct - or even intimate - knowledge of the operation of the existing, largely self-regulatory, system, and few of whom can be accused of routine “lawyer-bashing”. The Commission quotes from some of these submissions immediately below.

3.103 From the Registrar of the Legal Profession Disciplinary Tribunal, Mr Robert Bennett:

The main difficulty that I see in retaining the existing system is that despite the best efforts of many individuals it is no longer sustainable in the public perception for the professional bodies to exercise both a disciplinary role and promote the interests of their membership. I draw support for this observation from the many comments made by complainants or telephone enquirers to myself and other Registry staff. ... It might also be considered that under both the previous system involving the Statutory Committee and the existing scheme the profession has had the opportunity to convince the community of the integrity of the respective processes yet, rightly or wrongly, are seen not to have achieved that level of acceptance which is vital to such processes.¹⁰⁷

3.104 From the Chairperson of the Legal Profession Conduct Review Panel, Mr John F O’Neill:

In general we would say Option One would be a significant improvement but suffer from the perception of lawyers looking after their own.¹⁰⁸

Arguably any appropriate mechanism for resolution of complaints about lawyers must be a mechanism which is independent, at first instance, of lawyers’ professional bodies.¹⁰⁹

3.106 From the Foundation Dean of Law of the University of Wollongong (and administrative and consumer law expert), Professor Jack Goldring:

The public perception of self-regulation of any kind is one of well-justified scepticism. Even without your Discussion Paper, there are sufficient media reports to suggest that there is a general dissatisfaction with the way complaints about the provision of legal services, by both the private profession and government agencies, are handled.¹¹⁰

3.107 And from the Chief Magistrate of New South Wales, Mr Ian Pike:

Over recent years a number of complaints by Magistrates concerning the behaviour of members of the legal profession have been referred to their respective bodies. The outcome has been less than satisfactory in the view of the Magistrates bringing the complaints. My general view, and it is a view shared by a number of Magistrates, is that the disciplinary functions of the controlling bodies are effective only in the event of some monetary defalcation but otherwise there is little effective response. I think that generally speaking bodies which investigate their own members, even if the investigating authority has a token “outsider”, fails to respond as effectively as some independent body or person.¹¹¹

3.108 The Omnibus Survey (public opinion poll) conducted for the Commission by the Morgan Research Centre also demonstrated a clear public preference for the complaints handling system to be independent of the control of the profession (see above).

3.109 As detailed in the Commission’s report of its survey of complaint files (see Chapter 2), the apparently substantial statutory changes made to complaints handling by Part 10 of the Legal Profession Act 1987 have had a rather more modest effect in actual practice. All of this, taken together with the general principles enunciated in this Chapter, the other submissions received, and the rest of our research and consultation program, has led to the Commission’s conclusion that it cannot recommend modification of the existing system aimed at producing another “improved” version. Even if the Commission could be confident that such tinkering would lead to a greater appreciation of complainants’ rights, a reduction of the gap between consumer and professional interests and perceptions, more active and intensive investigation of complaints, and so on, it could not resolve the fundamental problem that the system would still lack the appearance of independence and thus would never enjoy complete public confidence.

3.110 This conclusion compels a choice between a Legal Services Complaints Commission (Option Two in DP 26) or a Legal Services Ombudsman and other related safeguards (Option Three in DP 26). For the reasons which follow, the Commission prefers the latter strategy.

3.111 Only one submission to the Commission suggested a fourth or any other significantly different approach. Mr Barry Hart, of the Chelmsford Victims Action Group proposed that any complaints handling procedure should come within the auspices of the Department of Consumer Affairs or, perhaps, be modelled on California’s Board of Medical Quality Assurance, which has significant consumer representation.¹¹² None of the submissions picked up on the California example of a legal complaints system independent of the practising legal profession but controlled by the judiciary.¹¹³

Balancing independence and accountability

3.112 If independence was the only major attribute required, the Commission would have opted for a legal complaints commission as the potent vehicle for asserting the independence of a complaints handling system from professional control. However, the Commission believes that the accountability of the system is also essential to preserving public confidence.

3.113 A certain amount of cross-fertilisation has occurred in this reference. The Commission has been asked to look at not only the disciplinary system in respect of individual (mainly private) lawyers¹¹⁴ (the subject of this Report), but also at the openness and accountability of public sector legal services, such as the Director of Public Prosecutions (DPP), the Crown Solicitor’s Office, the Legal Aid Commission, and so on.¹¹⁵ While the latter head of the reference will be the subject of a separate (and forthcoming) Discussion Paper and Report, the Commission already has received submissions in this area, many of which are addressed to alleged lack of accountability of some of these institutions.

3.114 For example, some of the submissions have pointed out that the Attorney General traditionally was accountable to Parliament (and at the ballot box) for the exercise of prosecutorial discretion (ie the decision to indict a person, or to issue a “no bill”, or to grant immunity from prosecution in exchange for testimony, or to accept a plea to a lesser offence). The creation of the DPP’s office was meant (in NSW and elsewhere) to de-politicise and regularise such decisions by vesting this discretion in an independent office holder. However, this increase in independence comes at the expense of accountability.¹¹⁶ Although the DPP in New South Wales, Mr Reg Blanch QC, has chosen, as a matter of principle, to offer reasons for some types of decisions (such as “no bills”), he is not obliged to do this, nor is there is any mechanism for compelling the production of reasons for other types of decisions (such as the use of an informer) or to challenge the accuracy or sufficiency of reasons which have been supplied.

3.115 Following years of criticism that the disciplinary system in California was slow, lenient and dominated by the legal profession, the California legislature responded with sweeping reforms which brought in an independent discipline office (with a separate State Bar Court under the control of the senior judiciary) which “has become a nationwide model” in the United States.¹¹⁷ Although only a very small proportion of complaints (1.75% in 1991) actually result in a prosecution before the Bar Court,¹¹⁸ there have nevertheless been charges from informed sources that “the goal of the bureaucracy is not to achieve justice but to boost discipline statistics and thereby satisfy the Legislature’s mandate to be tough on errant bar members” and that the prosecution “overcharges and under-investigates” complaints against lawyers.¹¹⁹

3.116 In New South Wales, the Health Care Complaints Bill 1992, which provides for the reconstitution of the Department of Health’s Complaints Unit as an independent statutory authority, was withdrawn late last year for further consideration and consultation after meeting with strong opposition from precisely those community groups which might have been expected to be among its strongest supporters. Among other things, groups such as the Medical Consumers Association and the Chelmsford Victims’ Action Group, were very anxious about what they perceived as a lack of accountability on the part of the proposed Health Care Complaints Commission.

3.117 Without having a view on the merits of this particular argument,¹²⁰ the Commission notes that the fact of this controversy supports our conclusion that consumer interests (and the public interest) are best served by a mechanism which provides for a high degree of accountability as well as manifest independence.

The nature and substance of complaints against lawyers

3.118 The design of a new system for the handling of complaints against lawyers requires a sense of proportion as well as devotion to principle. There are approximately 2000 complaints against solicitors and barristers each year, and it is common ground that the overwhelming majority of these relate to matters which are susceptible to consensual dispute resolution or raise, at most, issues of unsatisfactory professional conduct rather than professional misconduct. Few complaints raise the sort of (or the equivalent of the) “life-and-death” issues which the Department of Health’s Complaints Unit often must address.

3.119 In any event, most of the Commission’s concern about the inadequacies of the existing system do not relate to the handling of the serious allegations, which are usually treated with sufficient gravity (albeit rather slowly), but to the handling of allegations of substandard practice, such as poor communications, discourtesy, and delay. The latter category of complaints tend not to be fully or properly investigated, nor conciliated, and are too readily dismissed without sufficient consideration for the legitimate dissatisfaction of the complainant or the need to improve the legal practitioner’s professional or administrative (or personal) skills.

3.120 The Commission believes that the demography of complaints does not compel the introduction of a high-powered, prosecution-oriented, complaints commission. In this Report, the Commission makes a number of important recommendations aimed at closing what we have described as “the profound gap between what angered clients and what lawyers and their professional associations saw as important enough to merit disciplinary action”.¹²¹ Among other things, the Commission has recommended that:

• potential complainants be assured of effective advice and assistance, and access to the complaints handling system;¹²²
• much more emphasis be placed on the consensual resolution of lower level disputes, with the wider availability of compensation, and the possibility of simple arbitration as a back-up;¹²³
• the handling of disputes about fees and costs be integrated into the main complaints handling system;¹²⁴
• more matters involving unsatisfactory professional conduct flow through to the Legal Services Tribunal for hearing, with the Tribunal given flexible powers to fashion customised orders and sanctions;¹²⁵
• there be more community education about the delivery of legal services;¹²⁶
• there be much more concentration on the enhancement of professional ethics and standards, including attention to issues of education and prevention;¹²⁷ and
• that the complaints handling system be subject to vigorous external monitoring to ensure its independence and effectiveness.¹²⁸

3.121 The establishment of an office of Legal Services Ombudsman would be very well-placed to advance many of these objects directly, as well as to complement or scrutinise the efforts of other institutions in relation to the other matters. The Commission cannot see how a complaints commission would fulfil these particular aims more effectively or efficiently.

Cost considerations

3.122 In DP 26, the Commission noted that it was not clear that a complaints commission was necessarily a more expensive option than the others, and we pointed out that the annual budget of the Department of Health’s Complaint Unit was very similar to that of the Law Society in relation to disciplinary matters.¹²⁹ Most of the submissions, however - including those which supported the introduction of a legal complaints commission - regarded this as somewhat doubtful. Among other things, the many volunteers from the professional Councils will likely need to be replaced by salaried employees and paid consultants. It may be that differing methods of accounting (such as the placing as certain costs “off-budget”) or, more likely, hidden subsidies by the professional associations (such as rent, office supplies and so on) disguise the degree of actual difference in cost.

3.123 The Commission makes no positive finding in this area. However, in the preceding section, we have described the demography of complaints against lawyers in New South Wales. The cost of the complaints handling/disciplinary system is not immaterial, and it is questionable whether an elaborate or sizeable bureaucracy need be set up to handle the number and type of complaints which are presently received (and which are dealt with in substantial part by a voluntary work force).

3.124 As mentioned above, the complaints handling system in California “has become a nationwide model” in the United States. It has a large and elaborate disciplinary apparatus with an intake and preliminary screening staff of 75, an investigative staff of 113, and 55 prosecutors, as well as nine judges of the “State Bar Court” (who are appointed by the Supreme Court). The annual budget is well over $40 million and consumes three-quarters of the Bar’s annual operating revenue. Yet in 1991, out of 76,858 complaints received, only 6447 complaints (8.4%) were investigated, only 1345 cases (1.75%) were prosecuted,¹³⁰ and only 564 lawyers (0.73%) were eventually disciplined (although a number of cases are still pending).¹³¹ Thus, despite the costs involved, there are likely to be many dissatisfied complainants.

The benefits of the continued involvement of the profession

3.125 The Commission noted in DP 26 that amongst the potential disadvantages of the introduction of a legal complaints commission could be:

• hostility and lack of cooperation from the legal profession; ... and
• the possible loss to the system of accumulated expertise, at least in the transition.¹³²

3.126 The preliminary submissions from the Law Society and the Bar Association both strongly opposed the removal of the legal professional Councils from the disciplinary process. The Bar Association submitted that:

The establishment of additional structures which are separate and apart from the professional bodies creates tension between the profession and those organisations. They may give an appearance of accountability, but they do so at the expense of a quick, effective, protective regulation and dispute resolution. ... There is a fundamental and vital reason for not establishing such organisations [as a Complaints Unit or an Ombudsman’s office] to receive and deal with complaints. The existence of “external regulators” effects a shift in responsibility away from the individual professional, and the profession generally. That is a most retrograde step, and a difficult one to reverse.¹³³

3.127 As the Commission has already stated, “professional hostility is not in itself an argument against change, if this is clearly in the public interest”.¹³⁴ Nevertheless, the Commission accepts that there is merit in the Bar Association’s argument that the legal profession should take significant responsibility for the standards, conduct and practices of its members, and should not be compelled - or allowed - to play a purely passive role.

3.128 The new system that the Commission has recommended involves powerful external scrutiny of the operations of the professional association in the complaints handling area, but also envisages a high degree of cooperation between the professional Councils and the Legal Services Ombudsman in order to improve professional standards.

Independence of the profession and the rule of law

3.129 In DP 26,¹³⁵ the Commission noted in the course of considering the option of recommending an independent Legal Services Complaints Commission that, apart from the health care area, no other private professions¹³⁶ or service-providers (journalists, accountants, engineers, bankers, architects, etc) in New South Wales are subjected to so high a degree of public regulation.

3.130 The Commission posed the question, however, whether:

it may be that there is something different or special about the medical and legal professions which requires regulation in a different or special way. The relationship between lawyers and their clients is deeper and more intimate than is the case with many other professionals, and is set in a more highly-charged context. Clients often come to lawyers in response to trauma, or actual or potential peril (personal or financial). Dealings with lawyers may involve, and sometimes require, the revelation of sensitive personal details, taking advice on important life decisions, and making admissions about personal misconduct. Another important distinction may be the fact that significant amounts of public funds are expended for the provision of legal services (with most of that money going to private practitioners) through the legal aid system and the courts, and, especially, for the provision of health care services (through the Medicare system and the public hospitals). In these circumstances there is an argument that a greater measure of public accountability is appropriate.¹³⁷

The Commission still believes that such public interest considerations warrant the interpolation of an independent institution into (and external monitoring of) the regulation of the legal profession.

3.131 At the same time, the Commission recognises that another special and traditional feature of the legal profession is its independence from government control, in order to be free to represent those who challenge the (allegedly) excessive or abusive exercise of State authority. We have commented above on the tension between the need for independence on the one hand and the need for accountability on the other - or in this case, perhaps, on “the rule of lawyers” versus “the rule of law”. There is an accepted value in a liberal, democratic society that certain institutions - notably, the judiciary, the legal profession, the universities and the press - should be allowed some uncommon privileges and immunities in order to safeguard the broader public interest in preserving liberty by permitting the system of “checks and balances” (to use the American term) to operate. Such considerations are not present (or certainly not in the same degree) when discussing the regulation of doctors, architects or others. While these professionals rarely come into direct conflict with the State when representing the interests of clients, lawyers are regularly obliged to act against government officials, instrumentalities, and even the State itself.

3.132 The Commission’s recommended system should keep the legal profession properly accountable without jeopardising the profession’s independence from undue government control or influence. The Legal Services Ombudsman should provide a powerful check on the regulatory activities of the professional associations, but he or she also will be open to considerable scrutiny, and will not have direct, punitive powers; rather such powers will continue to be located in an independent tribunal which obeys the rules of natural justice. The potential for improper interference with the independence of the legal profession must be greater in a system which concentrates power in a public (governmental or quasi-governmental) authority which is itself not entirely accountable.

3.133 In the same way that the Commission would not lightly propose the creation of a powerful “Press Complaints Commission” with authority to censure and censor the media (as is currently being discussed in the United Kingdom), we also have some qualms about the prudence of recommending a Legal Services Complaints Commission. Such a course could be justified, but this would require compelling evidence that the mechanisms we have chosen to ensure independence and accountability have not worked (or could not work) to regulate the profession in the public interest, so that the balance should be tipped purposefully in the direction of a more independent but less accountable regulator.

Prospects for attaining a high public profile

3.134 In its preliminary submission, the Australian Consumers’ Association (ACA) compared the possibilities of establishing a Legal Services Ombudsman and a Legal Services Complaints Commission, and concluded that:

It is possible for either an ombudsman or a complaints unit to meet the principles of accessibility, accountability, fairness and efficiency, but we believe an ombudsman has an advantage. A single ombudsman can achieve a higher public profile, leading to greater public awareness, trust and therefore greater accessibility.¹³⁸

3.135 The Commission agrees that a single Legal Services Ombudsman is in a much better position to attain a reasonably high public profile through the mass media than is the head of a prosecution-oriented complaints commission. This is an important consideration, as we also foresee an important public role for the Legal Services Ombudsman, which includes community education about the legal profession and the delivery of legal services, advice and assistance to potential complainants, and the promotion of access to and confidence in the complaints handling system.

The desirability of uniformity

3.136 The Commission’s terms of reference are addressed to the need to develop the best complaint handling system for New South Wales. However, so long as it does not result in a “lowest common denominator” approach, there are also advantages in achieving a measure of consistency, if not uniformity, among the states and territories in this regard. Legal practice in Australia traditionally tended to be highly provincial - with a natural lack of mobility amongst law students and legal practitioners reinforced by the erection of barriers to reciprocal admission - but this has changed markedly in recent times, with legal practice taking on an increasingly national (and international) character. While few law firms dared to cross the New South Wales-Victoria divide as recently as a decade ago, preferring to use local agents in recognition of the rivalry and the ostensibly differing legal cultures, there are now be few firms of any significant size which do not have branch offices in several capital cities, with partners admitted to practice in all jurisdictions.¹³⁹

3.137 This trend will almost certainly intensify in coming years with better transportation and (especially) communications, and the needs of increasingly national and international markets for goods and services for parallel legal services. The High Court of Australia already has struck down legislation and practices aimed at unreasonably restricting the inter-state mobility of legal practitioners,¹⁴⁰ and the federal Trade Practices Commission is currently considering the general question of restrictive trade practices in the market for legal services.¹⁴¹ Recent amendments to the Judiciary Act 1903 (Cth) permit lawyers employed in the Commonwealth Attorney General’s Legal Practice “to practise as a barrister, solicitor, or barrister and solicitor, in any court, or in any State or Territory” (emphasis supplied).¹⁴²

3.138 One consequence of these important changes in the organisation of legal work is that it is now quite critical that the various state and territory authorities responsible for the regulation and discipline of the legal profession begin to liaise and cooperate much more closely. This will involve establishing systems for the exchange of information, and the reciprocal recognition and enforcement of disciplinary decisions which affect rights of practice or are otherwise aimed at the protection of the public. Reciprocal enforcement requires a reasonable degree of confidence on the part of state and territory authorities in the integrity, impartiality and fairness of each other’s disciplinary systems, and such confidence would be greatly enhanced by the maintenance of a common approach.

3.139 The Commonwealth Attorney General’s Department has proposed recently:

That a single independent statutory legal services ombudsman or complaints agency should be established in each State/Territory with responsibility for receiving, investigating and making recommendations concerning complaints made about any practising lawyer in the jurisdiction.¹⁴³

3.140 The Victorian Law Reform Commission, in one of its final reports, recommended the establishment of an office of Legal Services Commissioner for that State, similar in concept to the Legal Services Ombudsman which we have recommended.¹⁴⁴

3.141 This Commission believes that the establishment of similar systems for the handling of complaints against lawyers in New South Wales and Victoria would be an important step towards establishing a uniform, national approach. This would not only have symbolic value and create the momentum for uniformity, but would immediately bring about three-quarters of all Australian lawyers under the common regime, for that is the proportion of lawyers concentrated in those two States.¹⁴⁵

Preference for a Legal Services Ombudsman

3.142 For all of the reasons of principle and practice discussed above, the Commission believes that the best course is to establish an office of Legal Services Ombudsman with broad powers to receive, investigate and oversee the handling of complaints. As stated in DP 26, this course of action:

seeks to address the “weakest links” in the existing, largely self-regulatory, system of complaints-handling: namely the real and perceived lack of independence from the legal profession, the doubts about the initial intake of complaints and the adequacy of the investigation and, at the other end of the process, the efficacy of the external monitoring mechanism.¹⁴⁶

3.143 Taken together with other recommendations which enhance the breadth and depth of accountability, as well as the fairness and efficiency of the disciplinary system, the Commission is confident that the resulting system based around the office of the Legal Services Ombudsman will be one which restores public confidence in the handling of complaints against lawyers, satisfies individual complaints, and contributes to the enhancement of professional standards.

FOOTNOTES

1. See DP 26, Chapter 3. See also D Weisbrot Australian Lawyers (1990) at 164-171 and 201-210, for a summary of the regulatory regimes in the various states and territories.

2. DP 26, at para 3.97.

3. Victoria. Law Reform Commission Access to the law: Accountability of the legal profession (DP 24, July 1991). (Hereafter, “VLRC DP 24”.)

4. Victoria. Law Reform Commission Access to the law: Accountability of the legal profession (Report No 48, July 1992). (Hereafter, “VLRC 48”.)

5. Law Institute of Victoria The Law Institute’s Response to the Law Reform Commission of Victoria’s Discussion Paper No. 24: Access to the Law: Accountability of the Legal Profession (1991) at 3-4. See also DP 26, at para 3.27.

6. R Beatty “Handling customer complaints” (December 1992) The Australian Standard 35. The Commission understands that Standards Australia expects to produce terms of reference for this project soon.

7. American Bar Association Report of the Commission on Evaluation of Disciplinary Enforcement (May 1991), at iv (hereafter “ABA Report”).

8. ABA Report, at 19.

9. The California system is described in DP 26, at paras 3.146-3.151.

10. Royal Commission on Legal Services in England and Wales Final Report (Cmnd 7648, 1979) para 25.34 (also known as “the Benson Report”).

11. National Consumer Council In Dispute with the Solicitor (1985) 27. (Hereafter, “NCC Report”.)

12. NCC Report, at 27.

13. The English system in respect of solicitors was described in DP 26, at paras 3.110-3.130.

14. DP 26, at paras 3.120-3.126. The office is created by the Courts and Legal Services Act 1990 (UK) s 21.

15. DP 26, at paras 3.40-3.45.

16. VLRC 48, at para 83, Recommendation 1.

17. DP 26, at paras 3.152-3.183.

18. The Health Care Complaints Bill 1992 (NSW).

19. Law Society submission of 31 January 1992, at para 2.

20. “Other” responses were given by 0.8%, and 4.8% “could not say”.

21. 4.3% could not say.

22. NCC Report, at 16-19.

23. DP 26, at paras 5.4 and 5.17-5.20.

24. Submission of 10 August 1992, at 2.

25. Submission of 17 August 1992, at 1.

26. Submission of 26 June 1992, at 6.

27. Submission of 12 June 1992, at 5, per Mr John F O’Neill AM, Mr Peter C Wolfe, and Mr John I Einfeld AM.

28. Submission of 21 February 1992, at 1.

29. Submission of 28 February 1992, at 3.

30. Submission of 11 August 1992, at 4.

31. Submission of 8 April 1992, at 1.

32. Submission of August 1992, at 15.

33. Submission of 19 August 1992, at 1.

34. Commonwealth Attorney General’s Department Submission to the Trade Practices Commission (December 1992) Proposal 22, at 53. (Hereafter, “Commonwealth AG’s TPC Submission”.)

35. DP 26, at para 4.37.

36. See Weisbrot, at 204 and 210.

37. DP 26, at para 5.29.

38. See DP 26, Ch 3, generally.

39. ABA